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Honeywell International Inc. v. Mexichem Amanco Holding S.A. De C.V.

United States Court of Appeals, Federal Circuit

August 1, 2017

HONEYWELL INTERNATIONAL INC., Appellant
v.
MEXICHEM AMANCO HOLDING S.A. DE C.V., DAIKIN INDUSTRIES, LTD., Appellees

         Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. 95/002, 189, 95/002, 204.

          GREGG F. LoCascio, Kirkland & Ellis LLP, Washington, DC, argued for appellant. Also represented by William H. Burgess, Noah Samuel Frank; Joseph Michael Skerpon, Banner & Witcoff, Ltd., Washington, DC.

          Joseph A. Kromholz, Ryan, Kromholz & Manion, S.C., Milwaukee, WI, argued for appellee Mexichem Amanco Holding S.A. de C.V. Also represented by Patrick J. Fleis.

          Anthony F. Lo Cicero, Amster, Rothstein & Ebenstein LLP, New York, NY, argued for appellee Dai-kin Industries, Ltd. Also represented by MARION P. Metelski.

          Before LOURIE, Reyna, and WALLACH, Circuit Judges.

          OPINION

          LOURIE, CIRCUIT JUDGE.

         Honeywell International, Inc. ("Honeywell") appeals from a decision of the U.S. Patent and Trademark Office ("the PTO") Patent Trial and Appeal Board ("the Board") affirming the Examiner's rejection, in two merged inter partes reexaminations, of claims 1-26, 31-37, 46-49, 58, 59, 61-68, 70-75, 80, and 81 of U.S. Patent 7, 534, 366 ("the '366 patent") under 35 U.S.C. § 103. See Mexichem Amanco Holding S.A. De C.V. v. Honeywell Int'l Inc., No. 2015-006430, 2016 WL 1254603 (P.T.A.B. Mar. 29, 2016) ("Decision"). Because the Board erred in its analysis, and hence its decision, we vacate and remand.

         Background

         Honeywell owns the '366 patent, which is directed to the use of 1, 1, 1, 2-tetrafluoropropene ("HFO-1234yf')-an unsaturated hydrofluorocarbon ("HFC") compound-and a polyalkylene glycol ("PAG") lubricant in heat transfer systems, such as air conditioning equipment. See, e.g., '366 patent col. 13 11. 37-45. Claim 1 is illustrative and reads as follows:

A heat transfer composition for use in an air conditioning system comprising:
(a) at least about 50% by weight of 1, 1, 1, 2-tetrafluoropropene (HFO-1234yf) having no substantial acute toxicity; and
(b) at least one poly alkylene glycol lubricant in the form of a homopolymer or co-polymer consisting of 2 or more oxypropylene groups and having a viscosity of from about 10 to about 200 centistokes at about 37 °C.

Id. (emphases added).

         Mexichem Amanco Holding S.A. DE C.V. ("Mexichem Amanco") and Daikin Industries, Ltd. ("Daikin") (together, "Mexichem") filed requests for inter partes reexamination of the '366 patent, which the PTO granted and merged into a consolidated proceeding. During the reexamination, the Examiner rejected claims 1-26, 31-37, 46-49, 58, 59, 61-68, 70-75, 80, and 81 of the '366 patent as obvious over Japanese Patent H04-110388 ("Inagaki") in view of either: (1) U.S. Patent 4, 755, 316 ("Magid"); (2)Acura Service Bulletin No. 92-027 ("Acura") and "Patentee's Admissions"[1]; or (3) U.S. Patent 6, 783, 691 ("Bivens"). The Examiner found that Inagaki expressly discloses HFO-1234yf and that each of the secondary references-Magid, Acura/Patentee's Admissions, and Bivens-teaches the use of PAG lubricants with HFC refrigerants. Thus, the Examiner concluded that the claims would have been obvious over the cited prior art at the time of invention.

         Honeywell appealed to the Board, arguing that Inagaki does not teach the use of HFO-1234yf with any particular lubricant, much less a PAG lubricant, and that such a combination would not have been obvious to one of ordinary skill in the art. See Decision, 2016 WL 1254603, at *5. Honeywell argued that Inagaki does not teach or suggest the use of a PAG lubricant with HFO-1234yf because it teaches that the HFO refrigerants can be combined with other, less environmentally-friendly refrigerants, in order to "improve solubility, " thereby indicating that it teaches the combination of HFO refrigerants with immiscible lubricants, such as those commonly employed in the prior art. See id. Further, Honeywell argued that Magid, Acura, and Bivens use "HFC" to refer only to saturated HFC refrigerants, not unsaturated (i.e., HFO) refrigerants. See id. at *6.

         Honeywell submitted evidence that HFO refrigerants were disfavored at the time of the invention by those of skill in the art in that they were known to be reactive and unstable, and that PAG lubricants were also understood to be hygroscopic and thus unstable. See id. Therefore, Honeywell argued, one of ordinary skill would not have been led by Inagaki to combine HFO-1234yf, one of a disfavored class of refrigerants, with a PAG lubricant, known to be unstable. It argued that one of ordinary skill would have expected the combination to result in peroxide formation that leads to degradation reactions of HFO compounds that are not possible with the prior art saturated HFC compounds. See id. Honeywell also submitted evidence of secondary considerations-namely, the unexpected stability of HFO-1234yf in combination with PAG lubricants over other similar refrigerants combined with PAGs; long-felt but unmet need for compositions having certain environmentally-favorable characteristics; and skepticism that such an environmentally-friendly compo- sition existed, particularly one that also exhibits other desirable properties, such as low toxicity, stability, reactivity, and effectiveness. See id.

         The Board affirmed the Examiner's rejection of claims 1-26, 31-37, 46-49, 58, 59, 61-68, 70-75, 80, and 81 of the '366 patent as obvious. First, the Board found that PAGs were known lubricants for "HFC-based refrigeration systems, " as evidenced by Magid, Acura/Patentee's Admissions, and Bivens. Id. at *9. Thus, the Board concluded, because Inagaki teaches that the disclosed refrigerants, including HFO-1234yf, "do not have any problem with respect to their general characteristics (e.g., compatibility with lubricants . . .), " it would have been obvious to combine HFO-1234yf with "known lubricants" such as PAGs. Id. at *10 (emphasis added) (internal quotation marks omitted). The Board explained that the known drawbacks of using HFO-1234yf, such as toxicity, flammability, reactivity, and so forth, would not have deterred one of ordinary skill from choosing HFO-1234yf, as taught by Inagaki, because such disadvantages would have been viewed as merely a "tradeoff for the benefits touted by Inagaki-namely, "good cooling with little effect on the ozone." Id. at *8. Further, the Board found that, because PAGs were known lubricants, one of ordinary skill motivated to use HFO-1234yf based on the teachings of Inagaki would have arrived at its combination with a PAG lubricant by mere routine testing. Id. at *10.

         Second, the Board rejected Honeywell's argument that the claimed combination would not have been obvious because of the unpredictability of finding suitable lubricants for unsaturated HFO refrigerants based on information pertaining to saturated HFC refrigerants, or in light of the unexpected stability and miscibility of HFO-1234yf with PAG lubricants. Id. The Board found that Inagaki expressly discloses HFO-1234yf as possessing ozone-friendliness and other favorable characteristics for use in heat transfer compositions, and that its stability and miscibility with a PAG lubricant are properties that are "inherent to the refrigerant." Id. at *7-8 (emphasis in original). Thus, the Board concluded, the stability and miscibility of HFO-1234yf with a PAG lubricant are "inherent properties of an otherwise known refrigerant" that could not confer patentable weight to the claimed mixture. Id. (emphasis added).

         Finally, the Board found Honeywell's evidence of secondary considerations to be unpersuasive because of a perceived lack of nexus between the evidence and the claimed composition. Id. at *11. The Board explained that most of Honeywell's evidence shows that a "particular refrigerant" possessed desirable properties long sought after in the art, but that the refrigerant-HFO-1234yf- was known in the art. Id. at *12 (emphasis in original). Because the claims are directed to the combination of HFO-1234yf with a PAG lubricant, the Board concluded that Honeywell's evidence lacked a nexus to the claimed composition. See id.

         The Board also rejected Honeywell's evidence of unexpected st ability /miscibility of the claimed combination in light of JP H5-85970A ("Omure"). The Board disagreed with the Examiner, who reasoned that Honeywell's evidence of unexpected stability "do[es] not contradict the fact that stability is an inherent property of the refrigerant/lubricant pair." Id. at *13 (emphasis added) (internal quotation marks omitted). The Board acknowledged that "[e]ven inherent properties, to the extent that they demonstrate results beyond what would have been expected to one of ordinary skill in the art, particularly superior results that demonstrate more than a mere improvement in a property, are evidence that the invention is non-obvious and must be considered accordingly." Id. (citing In re Geisler, 116 F.3d 1465, 1470 (Fed. Cir. 1997)).

         Yet the Board found Honeywell's evidence to be un-persuasive because Omure states that a different unsaturated propene HFO compound has "relatively superior thermal stability" in PAG. Id. (internal quotation marks omitted). Thus, the Board concluded that, although Honeywell's evidence persuasively shows the unpredictability of "how various refrigerants would have reacted with various lubricants, " Omure provides evidence that one of skill in the art "would no more have expected failure with respect to the stability of combining [HFOs] with PAG than would have expected success." Id. at *14 (emphases added). Thus, the Board found that, due to the "overall unpredictability as to stability in the art, " one of ordinary skill would have arrived at the claimed combination by mere routine testing. Id. at *15.

         Honeywell timely appealed to this court. We have jurisdiction pursuant to ...


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